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  1. Simple Interest
  2. I
    = (P) (N)(i)
  3. Simple Interest
  4. Interest is
    • linearly proportional to the principal, interest rate & number of
    • interest periods
  5. (P/A)
  6. Principal
  7. (P/F)
  8. Principal
  9. (A/F)
  10. Annual Future
  11. (A/P)
  12. Annual Present
  13. Find F given P
  14. F=P(F/P, i%, N)
  15. Find P given F
  16. P=F(P/F, i%, N)
  17. Find i given P, F,
  18. I = N sqrt F/P-1
  19. Present Worth
  20. Equivalent worth of
    all cash flows relative to the time called "present"
  21. Future Worth (FW)
  22. Equivalent worth of
    • all cash inflows and outflows at the end of the planning horizon at an
    • interest rate that is generally the MARR
  23. Annual Worth (AW)
  24. An equal annual
    • series of dollar amounts for a stated study period, that is equivalent to the
    • cash inflows and outflows at an interest rate that is generally MARR
  25. Internal Rate of
    Return Method (IRR)
  26. Solves for the
    • interest rate that equates the equivalent worth of an alternative's cash
    • inflows to the equivalent worth of cash outflows.
  27. Single Payment
    Present Worth
  28. P = F(P/F, i%, N)
    Something will be worth F in the future, what should you pay for it now?
  29. MARR
  30. Minimum Attractive
    Rate of Return
  31. Critical Path
  32. A family of
    analysis techniques aimed at scheduling activites on a project
  33. Capital
  34. Money or property
  35. Interest &
  36. Pay providers of
  37. Economic
  38. Allows us to
    compare alternatives on a common basis
  39. Single payment
    uniform series (F/A)
  40. F = A(F/A, i%, N)
  41. External Rate of
    Return (ERR)
  42. Takes into account
    • the interest rate external to a project at which net cash flows generated (or
    • borrowed) by the project over its life can be reinvested (or borrowed)
Card Set
Engineering Economy terms for quiz2
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